European Demand For U.s. Government Bonds - 1079 Words

Multiple Choice Section 1) B – European demand for U.S. government bonds 2) D – No, if one currency appreciates, the other must depreciate. 3) A – Devaluation 4) A – Appreciated 5) C- Increase aggregate demand in Japan 6) A – An increase in U.S. imports 7) C – Aggregate demand shifts inward 8) B – Lower interest rates 9) C – Foreign capital will be attracted to the United States and the dollar with appreciate. 10) D – Inflows and exchange rate appreciation Open Ended Question 1) †¢ Concerns about the safety/stability of foreign assets relative to the United States. People want to invest and save their money in a currency that is not in danger of becoming worthless (like Germany’s after World War I ) †¢ Foreign economic boom and there is a greater desire for American imports. 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